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| The Tax Publishers2020 TaxPub(DT) 4495 (Mum-Trib) INCOME TAX ACT, 1961
Section 92C
TPO must have adopted one of the methods prescribed in income tax rules before rejecting method adopted by assessee and treating ALP as nil, therefore, TP adjustment made without applying any of the methods precribed, was not sustainable.
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Transfer pricing - Determination of ALP - Import of fixed assets from AE - Non-application of any of the prescribed methods
Assessee imported fixed assets of Rs. 23,20,989 from its AE and submitted details of international transactions in which assessee declared details of fixed assets purchases and method adopted for TP analysis declared as 'other method'. Assessee filed one invoice from its AE for purchase of Pulser Rig for the value of Euro 9217 and invoice of EP Engineering. TPO verified the same and concluded that there was variation in quantities mentioned in both. Accordingly TPO determined ALP of assets purchased at nil and suggested TP adjustment.Held: Purchase of fixed assets from AE was international transaction. There were supporting documents available for cost of fixed assets supplied by AE. If there was missing document, it was only for the markup charged by AE. Even though assessee had declared that it followed other method, in fact, not followed any method to arrive at the ALP. Accordingly, TPO must have adopted one of the method prescribed in Income Tax Rules before rejecting method adopted by assessee and treating ALP as nil. Accordingly, TP adjustment was deleted.
REFERRED :
FAVOUR : In assessee's favour.
A.Y. : 2013-14
INCOME TAX APPELLATE TRIBUNAL RULES, 1963
Rule 34(5)(c)
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